Jerry Frost invested equipment in his business having a fair market value of $23,500. What are the effects on the fundamental accounting equation?

Question

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When Jerry Frost invests equipment in his business, it increases the assets of the business by the fair market value of the equipment ($23,500). However, it does not affect the liabilities of the business. Therefore, the owner's equity of the business increases by the same amount as the assets ($23,500). This can be summarized as: Assets = Liabilities + Owner's Equity, and since there is no change in liabilities, then an increase in assets leads to an increase in owner's equity. Choice A accurately reflects these changes in the fundamental accounting equation.

Jerry Frost Invested Equipment in His Business Having a Fair